One in four people unaware of insurance change

One in four people are unaware that new European rules banning insurance
companies from taking gender into account come into force next month, in a
move that could add £500 to the insurance premium of a young woman driver.

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From December 21, new EU rules will make it illegal for insurance companies to take a person’s gender into account when they calculate a driver’s premium.

Because young women are deemed to be safer drivers than young men, their typical annual insurance policy is significantly lower than men’s. Currently, the average first insurance policy for a woman aged between 17 and 22 is £2,125 while it rises to £3,002 for a man, according to the AA.

However once the rules kick in a young woman’s premium will rise by up to 25 per cent, adding up to £500 to a typical annual policy, the motoring organisation said. Premiums for older drivers will not be affected as markedly.

Research by the group's insurance wing, AA Insurance, found that 26 per cent of Britons are unaware that their car insurance premiums will be affected by the gender ruling. This rises to 29 per cent among women, the group that is likely to be most affected.

Even those who are aware of the law are confused about when it will happen.

Of these aware of the change, 40 per cent have “no idea” when it will come into affect. A further 23 per cent think it will happen at some time next year.

Simon Douglas, a director at AA Insurance, said that young men are more than twice as likely as women to suffer a serious collision and therefore make big insurance claims. He said that calculating premiums based on that risk is fair and it works. However he said that this has been abandoned in favour of gender equality.

The law will come into affect after a European Court of Justice ruling last March.